Ahead of the Bell: Budget Deficit

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The federal budget deficit through the first four months of the current budget year is expected to be running 10 percent higher than last year's all-time record.

Economists surveyed by Thomson Reuters expect the deficit for January to total $47 billion. That would be down from the $63.5 billion deficit in January 2009.

However, even with the January improvement, the deficit for the first four months of the budget year is expected to total $435.5 billion, 10 percent higher than last year's pace.

President Barack Obama unveiled a new budget on Feb. 1 that projects the deficit for this year will hit a record $1.56 trillion, 10.1 percent higher than last year's then-unprecedented $1.41 trillion gap.

The administration is forecasting that the deficit will remain above $1 trillion in 2011, the budget year that begins next Oct. 1, and will never dip below $706 billion over the next decade.

Over the decade from 2011 to 2020, the administration is forecasting that the deficits will total $8.53 trillion.

The deficits have been driven higher by the worst recession since the Great Depression, which has cut into government tax receipts, as well as massive spending to jump-start the economy and stabilize the financial system.

The administration is promising to get control of the deficits once the country is firmly launched on a recovery. As a down-payment on that effort, the administration proposed in its new budget a three-year spending freeze on discretionary government programs outside of defense and homeland security. Obama has also said he will appoint an advisory commission to report by the end of this year on how to make more significant future cuts in the deficit.

However, critics contend that the administration is moving too slowly to get the budget deficits under control, especially in light of the retirement in coming years of millions of baby boomers, a development that will push spending higher on popular government benefit programs such as Social Security and Medicare.